are you frustrated to have only a small trading account well in this video our head of options trading teaches you a strategy that requires surprisingly little Capital to produce income of $500 or more per week I'm Mike Bella Fury and we're one of the top proprietary trading firms located in New York City and proud to have developed number seven and even eight figure perear Traders watch take notes and learn so you can grow your trading account hi I'm freudberg and I'm the head Trader of SNB capitals options trading desk here in Manhattan and when most people think about options they think of them as a cheap way to take advantage of big moves on stocks without having to actually go out and buy the stocks which of course is a part of what options trading is all about but what a lot of people don't realize is that options can be used for a completely different purpose and that is to create cash income on a steady basis week after week throughout the year here and that's through the use of a very easy tolearn option strategy that we're going to be covering in today's video if you're absolutely brand new to options trading and you don't know much about options and how they work we've created a video for you to understand options Basics and if you click the video appearing on your screen right now it will lay out the groundwork for you to understand this simple strategy that we're going to be covering so that you can generate cash flow in your trading account then when you're finished you can come back and watch the rest of the video okay so what we're going to be teaching you in today's video is a strategy for making $500 in most weeks of the year now most people naturally think that produce that kind of weekly uh cash income you'd need a large trading account containing somewhere between1 and $200,000 to even have a shot at making that kind of cash income but that's not the case at all for the strategy that we're going to be teaching you in this video in fact all you need is a fraction of of that in your account to execute what we'll be describing in today's video okay so let's get started as many of you know the ETF known as The Q's which stands for the ticker symbol QQQ is an ETF which track which tracks a basket of stocks mimicking the NASDAQ 100 index which contains primarily tech stocks and so as you know tech stocks have been on a tear in 2023 after a weak year previously and and throughout the first five months and into the first few days of June of this year the cues were up 34% for the year a massive rally in five months so let's say that on the first Friday in June on June 2nd with the q's trading at 35465 you pulled up an options train expiring a week later on June 9th and you looked for a put option on that options chain with a price of around 60 and in this case that was the 34 six put which was selling for 65 cents and you go ahead and sell 10 of those while simultaneously buying 10 of the 321 puts for 6 cents 25 points below the 10 that you sold up at 346 and so when an options Trader does that selling a put higher up on an options chain and buying a put lower on that same options chain then he's entering what options Traders refer to as a put credit it spread okay so let's take a look at the cash flow of this trade so you can start to understand how it works and so starting out with the 346 puts we sold for 60 remember each option represents 100 shares of stock that can be assigned to the put seller so you multiply the 65 cents times 100 and we sold 10 of them and so when you multiply it all together the resultant cash income from selling those 10 puts is $650 and using that same kind of math those 321 puts we bought for protection cost us $60 resulting in net cash income of $590 for this onewe trade which incidentally requires $4,410 in capital to execute now if you don't have that much in your account all you do is cut back the number of credit spreads you sell to fit your account size so for example if you sold half of those put credit spreads you'd bring in half of that amount of income and you'd require half that amount of capital and so forth now let's move to the day that this credit spread expires on June 9th and as you can see the stock barely moved that week closing at 35450 on that day and so what's the outcome of this trade well let's take a look at that you see both the 346 puts that we sold and the 321 puts that we bought are located at strike prices is well below where the stock closed on the day that they expired and so as a result both of them expire with no value because who would exercise their right to sell shares at a price of 346 or 321 when the stock is trading for a price of 35450 in the open market obviously no one's going to do that so those options just expire worthless resulting in the result of the trade being that we get to just keep that cash flow of $590 that we first received when we first open the trade okay so remember we're discussing a way to pull 500 or so out of the market most weeks on average in this video and so that's going to be our first trade that one we just completed and so on the day that those options expire we turn around and open up a new trade expiring again a week later again on June 16th and in this case the put option that sells for 61 cents is the 342 and again 25 points below that is the 317 which we're buying and paying 8 cents for resulting in$ 53 of cash flow in this case as you can see now moving forward to the expiration date of this second trade you can see that on June 16th that the stock rallied nicely in that ensuing week closing at 36793 and so again with both the 342 and 317 puts expiring worthless being so far below where the stock closed we again just pocket the $530 and so we just go ahead and repeat this same trade opening a 25o wide put credit spread with a short put priced around 60 cents every week on Friday and allowing it to expire the next Friday and as it turns out we had a pretty easy time of it throughout the summer and so since each trade is essentially the same to move this along we've created a scorecard for you for each of those trades which you can go ahead and check for yourself by the way if you have options data available to you and as you can see through all of June and all of July the expiration closing price of QQQ was above the strike price location on both the short and long put portions of the put credit spreads on their respective expiration days and so we just kept collecting uh about you know more than $500 in each of these weeks okay so now on July 28th we entered our first August trade and as you can see just like we did in all the previous cases we sold the 373 puts this time for 59 and we bought the 348 puts for 5 cents culminating in our receiving $540 however in this case for the first time since the campaign started in early June the stock closes below the short put strike of 373 and so at this point if we do nothing then we're going to be required to buy 1,000 shares of QQQ for the puts strike price 373 which would cost us 373,000 but we have a small account so what are we going to do well here's how we handle it a few minutes before the market expires we're going to close that put credit spread which that day would have meant buying back the 373 puts for a doll two and selling the 348 puts that we were long for just one and when you look at that cash flow of that buyback you can see that the cost of the buyback of the 373 puts was 1,020 and we only got back 10 bucks for the long puts and we only received 540 for getting into this credit spread trade in the first place and so once it's closed we have a loss a net cash outflow this time of 470 and so we've experienced our first trade loss as you can see from our updated scorecard but we have no intentions of allowing that loss to hurt us in the long run because we have a plan for this exact situation so at the end of that same day just a few minutes later we go to the call side of the options chain that expires a week later the August 11th chain but this time we sell a call option at the exact same strike price as the short puts in the last trade in other words we go to the 373 calls and we sell 10 of those and as you can see in this case we get $3.66 for those because those are so close to where the stock is trading and options close to the market price of a stock will always be worth more than the options farther away from that price and so in this case we're selling the calls this time but we're doing something else simultaneously with selling those 10 calls and that is that this time we're going to go way out to the end of the year December 29th and we're going to buy 10 of 370 calls expiring on that date for $24.7 now why are we doing this well here's our game plan once we took that first loss on the August 4th put spread we're now going to be essentially reverting to the call side and we are basically going to be selling against those December calls by each week selling 373 calls expiring one week later and so if the QQQ closes below 373 then we will let it expire and sell the calls expiring in the next week so we're going to do this repeatedly until the q's rally back above 373 at which point we will close the short calls and the long calls expiring in December and then resume our selling of put credit spreads each week so that's our game plan now keep in mind buying those 10 calls cost us 24710 and so you should think of that as the capital that we've deployed in the trade at this time and remember at the same time you sold those 10 calls for 366 so that part of the trade actually creates positive cash flow of 3660 okay so let's move out to August 11th the date the calls we sold expired and as you can see the q's closed at 36624 that day which is way below the strike of 373 calls that we sold and so those expire worthless why because when you're talking about calls those have no value if the stock closes below the strike price of the calls because again no one will exercise their right to buy shares of the cues at 373 when it's trading almost seven points below that in the open market and so those calls expire with no value meaning that we can now update our profit chart to show that we just gained a profit of $3,660 for selling those calls and so we just repeat the process because as we said we're going to keep doing this until we get a close above 373 on expiration so we go ahead and sell the 373 calls expiring yet another week later on August 18th but this time because the stock has now fallen to well below the 373 price three calls fetch a lot less in this case a116 which as a result produces a positive cash flow of $160 and so let's update our score card throughout the end of August and as you can see the stock had dropped to 35813 on August 18th so those calls expire worthless and we get to keep that 1160 in cash and moving to the August 25th expiration we didn't get paid that much for those 373 calls only $300 because in that case the 373 calls were an even larger distance from The Q's close on August 18th and so those had an even lower price tigle on them and so while the stock had begun to bounce it still did not reach 373 by the end of that week and so we again sell the 373 calls for the fourth time now with this set of calls expiring on September one as you can see in this case we received 90 cents for those producing 900 $ which is an improvement upon the previous week and so now let's move to September 1 when this trch of calls expires and as you can see this time the cues have closed at 3775 which is now well above our short calls for the first time in a month if we don't buy back those short calls when they expire in the money we're going to be obligated to sell 1,000 shares of the cues to the owner of those calls but we don't own 10,000 shares of the cues and so remember we said that when the q's close above 373 we'll close both the short calls at 373 and the long calls out in December at 370 and so toward the very end of the day we're going to go ahead and buy back those short calls which are now priced at 463 and simultaneously sell off the December long calls for 2425 and so analyzing what happen on that last transaction we'll first look at the short calls for which we received remember $900 but to close them we had to pay out 4,630 so we lost 3730 on that trade and don't forget we sold off those long calls in December but that was for a little bit less than we bought them for so that accounts for a small loss of $460 as well and so updating our scorecard 3 months into this campaign we can see that adding in the losses from closing the short calls and selling off the long calls results in a three-month campaign total gain of $ 5,30 which incidentally throughout the campaign the most Capital we ever needed on any one week's trades was $24,400 so we'll call that our capital for the campaign and that in turn results in a 20.5% return for the 3-month campaign and an 82% % return if you annualize that 3-month experience and so after this you just resume the original practice of selling put credit spreads bringing in about $500 or more per week in most weeks and then in weeks where the market closes below the short put strikes you can do as we showed you in this case buy back the put credit spread Buy Long calls far out of time a little bit in the money and combine that with a campaign of selling calls against those far out distant long calls repeatedly as we just showed you it's a very similar strategy to what some options Traders would call the wheel option strategy but this approach uses much less Capital than the wheel strategy which is why it's so advantageous to folks with smaller accounts so what I'd like you to take away from today's video is that you don't need to have a massive amount of capital to generate substantial positive cash flow in your trading account in most weeks a campaign of put credit spreads can yield you incredible returns in most weeks and when you run into a bit of a selloff you can use this call selling approach that we taught you in the video until you can close the call side and resume your put credit spread selling Campaign which can go smoothly for very long periods of time as we saw especially on stocks with a mildly bullish overall direction prot Traders use these techniques all the time and now you've got the knowledge to do this yourself now if you'd like to learn three more option strategies that our prot Traders use including the unique options trick that allows you to make money while you wait to buy stocks or ETFs at the price you want and the options income strategy that allows you to make consistent money whether the market goes up or down or sideways and how to make money on a stock or index trade even if you're wrong on the direction then click the link that's appearing right now at the top right hand corner of your screen that will open up the free Workshop 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